*SCALPSWINGSTRADDLE*

[Zephyr]

Personal Income and Outlays
Released On 3/28/2014 8:30:00 AM For Feb, 2014
Prior Prior Revised Consensus Consensus Range Actual
Personal Income - M/M change 0.3 % 0.2 % 0.1 % to 0.5 % 0.3 %
Consumer Spending - M/M change 0.4 % 0.2 % 0.3 % 0.1 % to 0.4 % 0.3 %
PCE Price Index -- M/M change 0.1 % 0.1 % 0.1 % to 0.2 % 0.1 %
Core PCE price index - M/M change 0.1 % 0.1 % 0.1 % to 0.2 % 0.1 %
Personal Income - Yr/Yr change 4.1 % 4.1 % 3.1 %
Consumer Spending - Yr/Yr change 3.5 % 3.4 % 3.0 %
PCE Price Index -- Y/Y change 1.2 % 0.9 %
Core PCE price index - Yr/Yr change 1.1 % 1.1 %
Highlights
Personal income and spending growth were moderate in February while inflation remained nearly nonexistent. Personal income advanced 0.3 percent, equaling the rise in January. Analysts projected 0.2 percent. The important wages & salaries component grew 0.2 percent, following a 0.3 percent increase the month before.

Consumer spending gained 0.3 percent in February after rising 0.2 percent the month before. Expectations were for 0.3 percent. Durables dipped 0.2 percent in February, following a drop of 0.5 percent the prior month. Nondurables made a partial rebound of 0.3 percent after a drop of 0.9 percent in January. Services slowed to 0.2 percent from a jump of 0.5 percent in January. The large gain in January was led by signups for the Affordable Care Act.

On a year ago basis, headline inflation was 0.9 percent in February versus 1.2 percent the month before. Core inflation on a year-ago basis held steady at 1.1 percent.

The consumer sector is moderately healthy in terms of income and spending although there has been some monthly volatility in the numbers over the last six months. On the spending side, durables have been weak with adverse weather likely cutting into auto sales. Weather also likely has weighed on income growth. Given the headwinds, the consumer sector is in decent shape, ready for improvement in the second quarter.